Sleek. Fast. A top pedigree. German automaker Porsche has successfully produced sports cars for more than 70 years that are known for their performance, quality, and reliability. Yet for all its long, storied history, it still only just managed beat out Kia, Land Rover, Mini, and Tesla Motors (NASDAQ: TSLA) on the list of most valuable global car brands.
But if Porsche is so far down the list, which cars ranked higher? Aston Martin? Lamborghini? Maserati? Nope. Those luxury carmakers didn't even make the more general list of top global brands, let alone the one for automobiles.
Driving value higher
According to brand consultancy Interbrand, there's a lot that goes into determining a brand's value. It uses an ISO-certified methodology that looks at how a business delivers on customer expectations compared with what it does to drive economic value, with the rankings based on a brand's cumulative value in three key areas:
- The financial performance of the branded products and services.
- The role the brand plays in influencing customer choice.
- The strength the brand has to command a premium price or secure earnings for the company.
From that assessment, it organizes the list of top 100 companies. I examined Interbrand's list of the best global companies and sifted out only those that made automobiles.
In the 2016 survey, Porsche was the 10th most valuable global car brand at more than $9.5 billion, an 18% increase over last year, when it held a similar car brand ranking but placed 56th on the overall global brand list. While it has steadily climbed the broader list, it has held its position fairly steadily for the carmakers.
So which were the brands that beat out Porsche as a top five global car brand?
Jockeying for position
It's probably not so surprising that the world's biggest car seller, Toyota, is also the most valuable brand at over $53 billion, some 23% more than runner-up Mercedes. Toyota sold over 10 million cars last year, beating out Volkswagen for the title of world's best-selling car manufacturer, but considering VW came in eighth on the biggest auto brand list, it's clear just selling a lot of cars doesn't mean your brand is as valuable.
Mercedes, though, made a big leap forward, with its brand value rising 18.5% in the last year, while Toyota was up only 9%.
And though Honda is in no danger of losing its fourth place pole position to Ford, which enjoyed a big 12% jump in value, the Japanese automaker's 4% loss could see it lose its standing on the world stage. Indeed, it fell from the 19th most valuable global brand last year to 21st this year, while Ford went from 38 to 33.
Speed bumps ahead
Rankings are slow to change year to year, but over time you can see the positioning shifting. For example, General Motors' Chevrolet brand fell out of the top 100 rankings altogether this year as Tesla made the list.
Not that Toyota doesn't face headwinds. Its third-quarter earnings report showed profits fell 36% to $3.78 billion, and it expects them to fall by a third for the full year as its results get hurt by a weak yen. After three years of record-breaking profits, it's a bitter pill to swallow, but it's looking to make more cars in the U.S. to offset the currency impact.
Still, with the Corolla remaining the top selling car over the first nine months of 2016, it's likely Toyota will repeat its performance next year as top global car brand, just as it has every year since 2004 when it first beat out Mercedes. This year's ranking is also the highest it's ever placed in the overall brand list, making it a tough act to follow, and with profit woes still ahead, it's possible it just might fall back once more.
Rich Duprey has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Ford and Tesla Motors. The Motley Fool recommends BMW and General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.